- By now it should be clear to regular readers that the modus operandi here is breakout trading.
- US 2s/10s yield curve is an interesting one and looks like it's worthwhile to do some work to make sure that this does not end up as another that got away (eg sugar).
- On my Reuters database (only back to 1988), the all time steepest level was +266 in Jul03. In Dec09, we took out this easily and trading at +288 now. Watched it break out and did nothing.
- With the Fed on a normalization path, but probably still some months away from an actual tightening, 2s/10s should remain steep and get even steeper. Stop loss below +266. I will try to get set on a steepener at reasonable risk/reward (not here). Clear downside, upside unknown but the sky's the limit. My favorite kind. Large negative carry though.
- When the time comes, will probably do +EDM1 vs -TYM0 (AC : PDH2 please, thank you). Bottom chart = TYc1 showing potential SHS top ie could get quite bearish.
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